To be successful in day trading, one must be able to spot up and down patterns quickly in stocks they're watching - But one question remains. "What stocks should I be watching?" is the question. You will be a mile ahead of other day traders not using this technique once you are able to master this technique.
A 'watch list' is something that top day traders have. This is actually a list that they are constantly watching, looking for patterns that indicate it would be a good time to buy. Watching stocks on their watch list is where the majority of a successful day trader's trades come from.
Do you know what the criteria for choosing a good stock for your watch list?
Liquidity is considered as one important criterion. It is a good rule of thumb if a stock happens to trade at least 1.5 million shares a day. It would do you no good if you can't quickly buy or sell your stock even if the stock matches all of the criteria. As most good day trading stocks trade in many millions a day, this is not too difficult to look for. In one day, it is up to 30 million or the huge liquid stocks. Keep out of thinly traded stocks. Being able to manipulate their price movement too easily is what the Market Makers can do.
Looking at the volatility of stocks is the next thing you would need to do. When it comes to a good stock for your watch list, make sure that it is a highly volatile stock as day trading profits are made when stock values change. Measure and compare companies you're considering by day, week, and month.
High dividend stocks should be eliminated as well. Day trading is not a long-term investing strategy, and the more dividends a company pays, the less money they're re-investing into the company's growth.
When you get a list of candidates, what you need to do is choose between five and thirty to put on your watch list. You can your way up to more stocks as you gain confidence and experience using your watch list as you start small in the beginning.
With this tip, you could earn thousands of dollars.
A 'watch list' is something that top day traders have. This is actually a list that they are constantly watching, looking for patterns that indicate it would be a good time to buy. Watching stocks on their watch list is where the majority of a successful day trader's trades come from.
Do you know what the criteria for choosing a good stock for your watch list?
Liquidity is considered as one important criterion. It is a good rule of thumb if a stock happens to trade at least 1.5 million shares a day. It would do you no good if you can't quickly buy or sell your stock even if the stock matches all of the criteria. As most good day trading stocks trade in many millions a day, this is not too difficult to look for. In one day, it is up to 30 million or the huge liquid stocks. Keep out of thinly traded stocks. Being able to manipulate their price movement too easily is what the Market Makers can do.
Looking at the volatility of stocks is the next thing you would need to do. When it comes to a good stock for your watch list, make sure that it is a highly volatile stock as day trading profits are made when stock values change. Measure and compare companies you're considering by day, week, and month.
High dividend stocks should be eliminated as well. Day trading is not a long-term investing strategy, and the more dividends a company pays, the less money they're re-investing into the company's growth.
When you get a list of candidates, what you need to do is choose between five and thirty to put on your watch list. You can your way up to more stocks as you gain confidence and experience using your watch list as you start small in the beginning.
With this tip, you could earn thousands of dollars.
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